Judge Rips Giuliani for Evasive Affidavit on Iran

MANHATTAN (CN) — New York’s former hardline Mayor Rudy Giuliani, a self-styled warrior against political correctness, drew a federal judge’s ire on Tuesday for dancing around the rude reality that his client is charged with violating U.S. sanctions.

Turkish gold trader Reza Zarrab, a wealthy ally of Turkey’s president whom Giuliani represents, stands accused of leading a multi-year conspiracy to launder money to Iran.

Together with former U.S. Attorney Michael Mukasey, Giuliani has pursued what his legal team delicately calls a “diplomatic solution” to Zarrab’s charges mediated through U.S. and Turkish officials.

Last month, Giuliani and Mukasey each signed affidavits stating that officials have been receptive about this deal because the transactions in Zarrab’s indictment did not involve nuclear technology or contraband, but merely “consumer goods.”

Accusing Zarrab’s lawyers of trying to “muddy the waters,” prosecutors later noted that their client stands accused of steering money to banks sanctioned for financing Iran’s nuclear program.

Making the similar observation at a Tuesday afternoon hearing, U.S. District Judge Richard Berman skewered Zarrab’s counsel for avoiding the elephant in the room.

“Most respectfully, the Giuliani and Mukasey affidavits appear surprisingly disingenuous in failing to mention the central role of Iran in the indictment, and indeed, failing to mention Iran at all in their affidavits,” Berman said.

On April 24, Assistant U.S. Attorney Michael Lockard accused Zarrab of funneling tens of millions of dollars to the Iranian government, and personally offering his sanctions-busting services in a letter to its former president Mahmoud Ahmadinejad.

Berman slammed Giuliani for his euphemism “in characterizing, presumably attempting to be dismissive of the transactions set forth in the indictment as involving ‘consumer goods.'”

“They know very well that if the allegations in the indictment are established by a jury, the defendant will be found to have committed serious felonies,” Berman said.

Suddenly transformed from straight-talker to master of evasion, Giuliani now finds himself playing a de facto diplomat at a fraught time for U.S.-Turkish relations.

In late January, Giuliani and Mukasey met with Turkish President Recep Tayyip Erdogan in Ankara, weeks before the Turkish leader seized broad executive authority in a referendum that human-rights advocates denounced as a sham election and naked power grab.

Giuliani’s law firm Greenberg Traurig is a registered agent of the Turkish government, and he and Mukasey are both high-profile Republican allies of President Donald Trump, who has real estate in Istanbul.

Given the hidden interests underneath the case’s surface, Judge Berman warned Zarrab on Tuesday that his lawyers’ divided interests could leave him vulnerable to shifting geopolitical winds.

“Do you understand that the fact that your lawyers from Greenberg Traurig represent you and simultaneously represent the government of the republic of Turkey [in a] case [that] may lead them to have loyalties divided between yourself and the government of the republic of Turkey?” the judge asked.

Though a Turkish translator, Zarrab replied that he understood.

From the business side, Zarrab could theoretically find his case compromised by Mukasey’s firm Debovoise Plimpton, which also represents banks tied to the case, including Deutsche Bank, Bank of America, JP Morgan Chase, Citibank, HSBC, Standard Chartered, UBS and Wells Fargo.

Affirming that he considered these risks, Zarrab said: “I have faith that this [possible conflict-of-interest] will be overcome.”
Zarrab’s constitutional right to conflict-free counsel is only part of the puzzle.

Berman emphasized that he could also disqualify Giuliani and Mukasey to make sure the prosecution “appears fair” and upholds “the highest professional standards of ethical responsibility.”

Outside the court, the Zarrab case has drawn concerns of political interference from the White House, including from Preet Bharara, the former U.S. Attorney whom Trump fired.

“One just hopes that the rule of law, and its independent enforcement, still matters in the United States and at the Department of Justice,” Bharara posted to Twitter on April 20, linking to New York Times coverage of the Zarrab case.

Zarrab’s lead attorney Benjamin Brafman has denied any impropriety, and he declined comment on the judge’s critique of his co-counsel, Giuliani and Mukasey.

Giuliani and Mukasey have not appeared in court to date, insisting that their work is primarily diplomatic, but Brafman and his client will appear for another hearing on May 11.